There was a great documentary on television today about the National Debt.
The program will be repeated tomorrow April 11, 3:00-5:00 p.m. EST on CNN
This is a short version of the original video that was made several years ago when the National Debt was "only $8 trillion" The new program has been updated to illustrate the current nearly $13 trillion debt. See the 30 minute old version at:
http://www.pgpf.org/newsroom/press/IOUSA...The program has a huge panel of noted economists that discuss the problem and the solutions.
I had some problems with some of their figures and wonder if the stats were taken from the original outdated video. For example they say that interest on the National Debt was only something like $221 billion , but in 2008 interest was $451 billion and that was before the trillions of stimulus and bailout money was borrowed.
The problem of course is that the American people are spoiled. They refuse to cut any spending on any entitlement programs. They think earmarks are terrible unless it is their congressman bringing home the bacon, and they refuse to even discuss any taxes. Several of the panelists stated that Health Care and Medicare spending was the greatest threat to the future debt, yet even the Republicans screamed bloody murder when modest medicare cuts were discussed.
They also discussed military spending and how no one wants to threaten America's security even though we spend more on the military than the rest of the world combined.
Today the budget is about equally divided with Military being about 1/4th, Health Care about 1/4th, the interest on the National debt about 1/4th, and everything else combined about 1/4th. If China decides to invest in something more profitable than our debt (which they are thinking about doing) we will have to increase the interest on our T bills which are now at record lows. The interest on the debt may be as much as 40% of the budget in 12 years.
http://www.federalbudget.com/The program talks about the need to cut the budget and government programs, but military spending accounts for about 65% of discretionary spending and few are talking about cutting that. Most of the rest of government spending is already stressed. Schools are shutting down, bridges need to be replaced for earthquake safety and our water sewer and other infrastructure is crumbling. Where are the cuts going to come from? Benefits of entitlements like Social Security and Medicare, will have to be gradually reduced while the revenues are increased.
This year's huge deficit was necessary to stave off another depression and paying it off may seem insurmountable but it is smaller than the debt after WWII and the Great Depression as a percentage of GDP. But then people were willing to sacrifice.
In my opinion there are several factors that caused the debt. Ronald Reagan is guilty of starting the recent trend in growing the debt with his tax cuts and military spending, but he is even more responsible for the debt because of his trickle down economic theory and the myth that cutting taxes raises revenue. Another big part of the problem is that 172 Congressmen and 35 Senators, almost all Republicans, have signed Grover Norquist's anti-tax pledge at Americans for Tax Reform.
Republican Congressmen have vowed never to raise any taxes for any reason, war, economic collapse, it doesn't matter. To them tax cuts are the answer to any problem. Americans for Tax reform funnels huge amounts of money to Congressmen that honor their pledge and cut off funding and actively work for the election of opposition if they break their pledge.
Middle class people are very angry today because they think taxes are already too high, but half of the people in the country and two thirds of the corporations pay no taxes at all, and the richest of the rich are only paying 17% of their income in taxes, even though the top tax rates have historically averaged 70% and have been about 90% during times of war (like now).
http://articles.latimes.com/2010/feb/24/...The problem is not that people are taxed too much. The problem is that the middle class bears most of the burden, because the rich and the corporations are not paying their fair share.
But then that is just my opinion.
Please see the documentary tomorrow and see what the experts think.